Do hybrid cars save money?

There are some questions that mankind has puzzled over since the beginning of time: Why are we here? What happens after we die? Why do men have nipples? Is a hybrid car worth it?

That last question isn't as old as the rest. Since Honda introduced the first mass-produced hybrid with the Insight in 1999, car owners have been gauging if the premium for a hybrid is greater than the fuel savings over time.

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Much like fuel economy estimates, the real world answer varies.

"There's no right answer," says Bob Curry, President of the Hybrid Shop, a Washington, D.C- based company that specializes in aftermarket hybrid diagnostics, equipment and training.

It depends on how much you drive, how you drive and how long you own your car.

With hybrid hallmarks such as start/stop systems and regenerative braking systems being adopted by more automakers in non-hybrid vehicles, the hybridization of power trains is no mere trend.

There are 71 hybrid models (including plug-ins) in the North American market in 2014; there were 2 in 1999.

"By 2020, we expect most vehicles to be electric driven in some shape," says Dr. Mark Quarto, a GM retiree who is now the Chief Technical Officer for Automotive Research & Design (ARD), a company that specializes in hybrid vehicle diagnostic equipment and training.

Consumer demand and government regulation has led to the most fuel-efficient cars in history. With an average transaction price of $32,000, new cars are the most expensive in history as well. But it's offset by reduced operating expenses, especially in the case of hybrids.

The average premium for a hybrid is $4,647 more than gas-only counterparts, according to a late 2013 analysis done by Vincentric.

The same study reported that five years of ownership at 15,000 miles in a hybrid car will result in an average fuel cost savings of $3,371. Therefore, the average hybrid premium doesn't make sense for a dozen or so models, including inefficient and expensive hybrids such as the full-size SUV Chevrolet Tahoe or Cadillac Escalade, which is why GM discontinued them in model year 2013.

Some hybrids, such as the 2013 Lexus CT 200h can save nearly $6,500 compared to the Lexus IS 250 in reduced operating costs. The Lincoln MKZ hybrid saves nearly $5,000 over the gas counterpart because the sticker price is nearly the same.

Most hybrid models haven't been around for five years.

As for the peerless earliest hybrid adopters, the Insight and the Prius save an average of about $1,000 over similar gas models, such as the discontinued Toyota Matrix.

"You'll get more for your money the longer you continue to put miles on it," says Phong Ly, CEO and founder of used car aggregator iSeeCars, which recently released a study of the longest-lasting hybrids.

"The battery pack is a living organism and is constantly working, so it's always aging," says Quarto of ARD.

The nickel metal hydride batteries that power most hybrid cars and all Toyota and Lexus vehicles experience a gradual loss of capacity, performance and fuel economy over time, from 50 mpg down to 42 mpg. That's significant for hybrid savings over time and perhaps more importantly for vehicle operation.

"The consumer might not notice it until they're in traffic and can't make the same move they once did," says Bob Curry of the Hybrid Shop, which is an affiliate of ARD.

Factors such as climate, excessive heat, driving habits and usage all contribute to battery life. Curry uses the example of a Toyota Prius taxi. The air inlet to cool the hybrid battery on a Prius is on the passenger side rear door. For a Prius owner, that door isn't used that often. For a taxi, that door is used dozens of times a day, increasing the amount of lint and dirt that gets in the vent.

"The battery doesn't get the air it needs," he explains, leading to increased battery degradation. "Generally speaking, it's safe to say that diminished battery power starts at about 80,000 miles."

The solution is battery replacement, which can cost about $4,000 at the dealer. Curry's company can replace modules in the battery for half the price.

You may never need it. The hybrid battery life is conditional, if not unpredictable.

"A few years ago, the major concern was hybrid batteries wearing out," says Eric Ibara, Director of Residual Value Consulting at Kelley Blue Book. "The concerns did not come to pass, for the Prius in particular."

The Prius was introduced seven months after the Insight, which Honda discontinued this year. Toyota now makes about 70 percent of all hybrids on the road, according to Quarto.

"It's not uncommon for the Prius to go from 200,000 to 400,000," without a battery change, says Quarto.

Yet the Prius ranks only fourth in hybrid longevity in the study of 20 million cars by iSeeCars. The Honda Civic Hybrid was first, with 5.4 percent of vehicles in its database listed at over 150,000 miles, averaging about 10 percent more miles per year than the average Prius. The Toyota Highlander and Ford Escape were next on the list of longest lasting hybrids.

The study doesn't say if those hybrids with over 150,000 miles have had any work done, but it gives some sense of consistency over time, especially given the growth of the used hybrid market.

The best way to test the health of a used hybrid system is to get a hybrid specialist to run diagnostics on the vehicle, which can cost between $300 and $500. That's another cost to factor into the purchase price, but can be well worth it if there is no used hybrid premium as in the case of the 2005 Civic.

Despite the conditional calculations and varying performance of used hybrids, the biggest difference a driver can make to improve fuel economy and lower operating costs is wisdom that's as old as the first engine: drive slower, drive smarter.